Australian officials have been involved in confidential talks with the US aimed at heading off a formal trade dispute over the confiscation by NSW of US-owned assets worth $131 million.

Unless the affair is resolved, Australia could come under pressure from the Trump administration to agree to international arbitration aimed at forcing the federal government to compensate US investors.

Three-way talks over the affair took place within the past two weeks and involved representatives of the federal and NSW governments and the US.

Federal Trade Minister Steve Ciobo was asked about the phone conference with the Americans before he left yesterday for talks in the US. His spokesman said the minister had nothing to say.

The affair threatens to embarrass NSW Premier Gladys Berejiklian, who leaves today to join Mr Ciobo and Malcolm Turnbull for discussions with US officials.

The three-way talks were aimed at addressing growing concern in Washington over the way the government of one of Ms Berejiklian’s predecessors, Barry O’Farrell, expropriated a coal exploration licence from a mining company, NuCoal Resources, that is part-owned by US institutions.

NuCoal chairman Gordon Galt said the latest talks were the result of a confidential letter from the US to the federal government.

“We understand the three affected parties, Australia, NSW and the United States, were all parties to the latest discussions,” he said.

“They have now gone away to seek counsel from their bosses.”

Mr Galt said he was aware the NuCoal expropriation would be raised during talks between US governors and Ms Berejiklian. “We are also pushing hard for it to be raised at the Trump-Turnbull level,” he said.

Mr Galt had provided a briefing on the affair for a US senator, who raised it with Australia’s ambassador to the US, Joe Hockey.

“I expect that at least one and possibly three US governors will raise this matter at the talks,” he said.

Before the expropriation, NuCoal had been valued at about $400m and US institutions owned 30 per cent of the company.

After the expropriation, NuCoal’s capital value fell to about $20m. Once interest is added to the value of the lost asset, NuCoal estimates its shareholders are owed a total of $437m.

On NuCoal’s figures, US institutional investors are owed $131m while the company’s Australian shareholders are owed $306m.

The US investors have complained to their government that the expropriation breaches a treaty that guarantees American assets will not be taken by Australia unless this is done with due process of law and is followed by prompt and adequate compensation.

They believe the conduct of the NSW government has placed Australia in breach of its free-trade agreement with the US.

The O’Farrell government cancelled NuCoal’s licence using special legislation that banned legal challenges, prevented the payment of compensation and was based on accusations of wrongdoing by others, not NuCoal.

The expropriation had been based on a report by the NSW Independent Commission Against Corruption that had examined the way in which the former Labor government had issued several coal exploration licences.

NuCoal, which was not a party to ICAC’s inquiry, obtained its licence 14 months after it had been issued when it bought the original licenceholder, Doyles Creek Mining.

No accusations of wrongdoing were ever made against NuCoal.

At the time of the expropriation, the findings in ICAC’s report had not been tested in court.

Last week, the NSW parliament was told the report had ignored evidence given in secret by former Labor premier Nathan Rees. It instead had relied upon inconsistent testimony that Mr Rees gave at a public hearing conducted by ICAC, parliament was told.

The O’Farrell government accepted ICAC’s recommendation that the licence should be expropriated but rejected an associated recommendation that innocent parties should be compensated for losses caused by the expropriation.

As well as stripping NuCoal of its exploration licence and absolving itself of liability, the O’Farrrell government required NuCoal to give the government — without compensation — all the exploration data it had assembled.

The NuCoal affair has long been a cause of concern to the American Chamber of Commerce in Australia.

Two years ago, the US business group had talks on the affair with officials from the Department of Foreign Affairs and Trade and referred it to the office of the US Trade Representative.

After the talks with DFAT, the former chief executive of AmCham Australia, Niels Marquardt, told The Australian the NuCoal expropriation was “a ticking time bomb”.

]]>http://wavetheflag.org.au/2018/02/18/icac-exposed-yet-again-sky-news-podcast/feed/0The Hon. Dr Peter Phelps – Speech in Parliament (13/02/2018)http://wavetheflag.org.au/2018/02/14/the-hon-dr-peter-phelps-speech-in-parliament/
http://wavetheflag.org.au/2018/02/14/the-hon-dr-peter-phelps-speech-in-parliament/#commentsWed, 14 Feb 2018 05:29:27 +0000http://wavetheflag.org.au/?p=1338The following speech was given The Hon. Dr Peter Phelps in the Legislative Council of Parliament on 13 February 2018.

The Hon. Dr PETER PHELPS(17:04): I am not a member of the Committee on the Independent Commission Against Corruption [ICAC], but I commend its work and I commend the people who work on the committee. The committee report “Review of the 2014-2015 and 2015-2016 Annual Reports of the ICAC Inspector” relates to the work of the ICAC Inspector in the past two financial years. The ICAC Inspector for the last two years was the Hon. David Levine AO, RFD, QC, and is now Mr Bruce McClintock, SC. I commend their work.

The Inspector is an important position which maintains a role of watching over the Independent Commission Against Corruption and ensuring that in a number of instances, procedural fairness, amongst other things, has been granted to people who have attended ICAC. That is a very important role, given what has happened in ICAC over many years.

I refer members to recent reports in the media that people who have suffered particular hardship brought about by the investigations into Operation Jasper and Operation Acacia have been making representations to the current Inspector in relation to those investigations. I urge Mr McClintock, the new ICAC Inspector, to take these matters quite seriously. Operations Jasper and Acacia revolved around the granting of licences at Doyles Creek, Mount Penny and Glendon Brook. Allegations had been raised in relation to the involvement of Mr Eddie Obeid and Mr Ian Macdonald. I will come to that a little later. Suffice it to say that the conduct of operations Jasper and Acacia were dreadful—not least because of the involvement of the then Premier Mr Barry O’Farrell, who sought to intervene in the matter by writing directly to then Commissioner Ipp in relation to proposals for the expropriation of the titles at the Doyles Creek and Mount Penny operations.

As Liberals we should believe very strongly in the sanctity of private property and private property rights. But following the Operation Jasper and Operation Acadia investigations three bills were introduced. Two of those bills were introduced by Mr O’Farrell. The three bills were the Mining Amendment (ICAC Operations Jasper and Acacia) Bill 2014, the Criminal Assets Recovery Amendment Bill and the Mining and Petroleum Amendment Bill 2014. There was a subsequent bill introduced by Premier Baird; however, we do not need to go into that at this stage. Suffice it to say that the conduct of the inquiry in relation to Jasper and Acacia was substantially flawed. As I understand it, people who have suffered debilitating consequences of that inquiry have written to the current Inspector of ICAC, Mr McClintock, to seek some form of redress. That is an important feature of our system, and it should be followed through to the maximum extent possible.

Although Inspector Levine previously stated that he had limited resources to investigate these matters, I urge the Government to make more resources available if Inspector McClintock does not have the resources to deal with these matters effectively. The entire Acacia and Jasper investigation was handled terribly. It was handled almost to the point of gross mismanagement—the sort of gross mismanagement which leads one to consider whether it should be considered a valid investigation in the first place.

Certainly for the investors who were with NuCoal Resources and Cascade Coal the consequences have been absolutely terrible. After being called back to a sitting of this House at urgent notice by Premier O’Farrell, this House passed the ICAC bill which allowed for the expropriation without compensation. Why did we do that?

Members of this House were told that we did that because it was a recommendation of ICAC. What we were not told was that Premier O’Farrell had contacted Commissioner Ipp to have the commissioner look in the direction of recommending an expropriation of licence. We know about this only because an admission was made public subsequently that Premier O’Farrell had contacted Commissioner Ipp.

We also know that, even though there was no evidence whatsoever of corruption on the part of either Cascade or NuCoal, this Parliament decided to expropriate the licences from those companies without compensation, which was indirect contradistinction to what ICAC had recommended. ICAC had recommended that the licences be expropriated but that compensation be paid to innocent parties, including innocent investors in NuCoal and Cascade. Why did Premier O’Farrell decide to expropriate without compensation? I do not know. I can guess why. Perhaps he did not want to muddy the waters with ideas that there might have been some innocent people involved in those transactions—that it was all horrible “Macca” and horrible Eddie—whereas there are hundreds and hundreds of Cascade and NuCoal investors who now find themselves out of pocket.

It is worthwhile drawing to the attention of the House the experiences of the Lantry family, who have no objection to my mentioning their names. The Lantrys—Darrell, Michelle and their then two-year-old son, Oscar—were all shareholders. The family lost “a few hundred thousand” dollars, given that all parties, including the confiscator-in-chief former Premier Barry O’Farrell, declared NuCoal innocent, and are rightly calling for NuCoal to be compensated. Darrell Lantry explains:

I am an average guy who works my whole life, works two jobs and so forth, so had a go at the sharemarket over the years and have been semi-successful.

The 3,400 NuCoal shareholders became political cannon fodder for Premier O’Farrell and his pursuit of NuCoal and Cascade Coal. They were roadkill on the juggernaut that was directed towards Eddie Obeid. Michelle Lantry, who works full time, recalls:

When Barry Farrell first suggested the lease could be taken from NuCoal, I remember Darrell saying “that can’t happen, that’s never happened … they can’t just come and do that, that would never, never happen.”

Michelle Lantry is right. One of the first acts of this Parliament was to establish the principle that there should be no expropriation without compensation. The State Government granted the right to compensation until a later New South Wales Government changed the rules. That is not replicated in the Federal Constitution, which specifically states that expropriation must be met with fair and reasonable compensation. What the subsequent New South Wales Government did was rushed, silly, economically vandalic and now leaves the State facing large‑scale compensation claims. The claimant investors are not mum and dad Australians: They are Americans, New Zealanders and Japanese. Through the free trade agreements we have with those countries, all the American, New Zealand and Japanese investors have taken recourse to the non-expropriation clauses of those agreements to seek compensation from Federal Minister Ciobo. Ultimately, that compensation will fall back on the New South Wales Government.

It is time for the ICAC Inspector to seriously examine what happened in Operation Jasper and Operation Acacia, particularly focusing on the horrible manner in which it was handled and the disgraceful manner in which measures subsequently were implemented in Parliament. Finally, I state on the record that Ian Macdonald might not be innocent, but I am coming more and more to the belief that he was nowhere near as guilty as portrayed.

It is O’Farrell’s first full-time role since he famously quit politics over a gifted bottle of Penfolds Grange wine.

Far from using his vast array of skills in a behind-the-scenes directorship, O’Farrell will be required to perform a hands-on role in a unique industry riddled with disputes. “From the industry perspective it’s an interesting, and possibly confusing, appointment,” Australian Trainers’ Association chief executive Andrew Nicholl said.

“We have no idea about what skills he’s going to bring to the table and what his background is in terms of racing, but from the ATA’s perspective we welcome him and will work with him for the betterment of the industry.”

Our common law system with all its appeals, formalities and procedures, checks and balances, hard-won evidentiary rules developed for the protection of individual liberty, may be slow and even arcane. But the hierarchy of the courts, and the many sets of eyes that review every allegation at every point, ensure that the citizen is not subject to the arbitrary view of a single person in whom is reposed the functions of investigator, prosecutor, judge and jailer. The right to a fair trial is an essential human right in all countries respecting the rule of law. In fact, the right is much more widespread than that. Article 11 of the Universal Declaration of Human Rights says: “Everyone charged with a penal offence has the right to be presumed innocent until proved guilty according to law.”

The presumption of innocence finds expression in the direction to the jury that the onus of proof rests upon the Crown. It is proof beyond a reasonable doubt of every element of an offence as an essential condition precedent to conviction which gives effect to the presumption.

You may not be surprised to hear that, this being the 40th year in which I have served in our common law system, I have developed a guarded sense of caution about governments creating self-contained, autonomous investigating bodies that are not courts and which have no judicial functions but which have extraordinary powers that abrogate fundamental common law and human rights and privileges.

These bodies have no power to determine guilt but that message is lost because the media machines they invariably have ensure that any apparently damaging material they can suggest about their targets is spread across the press, often embroidered with salacious associations that are tenuous at best and ­malicious fiction at worst. But surely bodies with coercive powers which exceed those of the police, the ability through their media machines to inflict serious damage on the lives and reputations of individuals even during the course of their investigations, and power to issue public reports that condemn people irreparably without need of proper proof, should be required to apply high standards of natural justice. These government investigative bodies, commissions of various sorts, are concerned with a much earlier phase than the courts — determining whether to recommend that a charge be laid — and their recommendation is not determinative.

They bring together in a single office, the roles of investigator, prosecutor, judge and media unit, abandoning the traditional separation of those roles, and the objectivity and fresh sets of eyes on an allegation, or suspicion, the proper criminal justice system boasts.

The staff of ICAC are all part of a team, championing their achievements with a crusading zeal. And the specific ethical obligations of investigator and prosecutor are blurred by people doing both and defending, as it were, the investigation they have initiated or directed.

Even with the best will in the world, the people making the decisions in agencies like ICAC to search and seize and go public are highly likely to be influenced, and influenced early, by the suspicions that are part of the investigative process and susceptible to making subjective rather than objective assessments of the need for the use of invasive powers. There’s an enormous trust and acceptance of these bodies, some of which almost claim infallibility. And then redress to the proper courts of law is often removed or made impossible.

In my case, every lawyer I knew urged upon me the view that ICAC had clearly gone way beyond its charter.

ICAC has neutered both major political parties, taking down a premier, a police minister and has ended the career of Murray Kear, a fine emergency services commissioner, the latter for the ­obscure ­offence of dismissing a whistleblower.

It has also encouraged the expropriation of mining leases to the detriment of thousands of innocent shareholders in an equally innocent company, NuCoal. How is ICAC qualified to make such recommendations when it understands nothing about sovereign risk and the consequences to the investment reputation of NSW?

In my case, it went after a barrister, a silk, a member of Bar Council, a deputy senior Crown prosecutor and a commissioner into an inquiry about pedophile priests with almost 40 years of unblemished service. And it targeted her family. All over a car accident I was nowhere near.

The treatment of Kear, a decorated fireman, was particularly disgraceful. In this case, the said whistleblower had made allegations against another employee that were false. Kear made herculean efforts to counsel her and help her adjust to the organisation and the demands of her role. Finally her services were dispensed with and she complained to ICAC. A public hearing was held and ICAC branded Kear corrupt and recommended criminal charges. He was asked to resign and did, losing superannuation benefits that can never be recovered. During the criminal proceedings it was discovered that ICAC had not served upon Kear evidence from witnesses in private hearings who had given testimony favourable to him.

The magistrate said: “I find that investigators cannot simply choose not to serve such evidence from witnesses because they have provided evidence contrary to the prosecution case.”

He found that the ICAC investigation had been conducted in an unreasonable and improper manner and that the proceedings had been initiated without reasonable cause and dismissed the charge because the evidence in support of the defendant’s contention was overwhelming. ICAC still maintains Kear is corrupt and will not remove that finding from its website. He has not been offered the chance to return to his position.

One of the extraordinary powers this outfit has is the power to initiate investigations without anyone else granting terms of reference or otherwise authorising them, formulating its own allegations and investigating in its own way.

It doesn’t require a victim, a complainant, an aggrieved bystander or a policeman saying these people should be charged. It just starts, and no one is there to cross-examine about what they allege against you. You don’t know where it has come from. You just know it’s wrong.

We challenged ICAC’s jurisdiction to investigate an allegation that didn’t amount to corruption and the NSW Court of Appeal agreed with us. When ICAC carted my son, Stephen, his girlfriend Sophia and me to the High Court, Chief Justice Robert French (concerned for my family’s finances and the enormous imbalance between us and the unlimited resources of the state) raised the question of costs. He said to counsel for ICAC that because they sought to pursue the appeal because it affected “a variety of other investigations”, they should undertake to pay our costs. That undertaking was made.

ICAC has since challenged our costs all the way, resulting in them being severely taxed down to about half what has been incurred. My family will end up hundreds of thousands of dollars out of pocket. ICAC knows that even when it loses, it can harm targeted families in this crippling fashion.

I have two other sons who were 24 and 22 when this began, and they have suffered too. The kids didn’t know it but I had risked our home in legal costs to prove what I knew from the start in my gut was true. ICAC had no right to do this to my family.

“We need a strong ICAC,” the catchcry goes. Well, we need a strong police force even more, and we have one because of the stringent accountability and constant scrutiny to which it is subject, including the way its methods and decision-making are tested each day in our proper courts.

Police know that they may be cross-examined in court about every decision they make about any suspect. But the people who make the decisions at ICAC and who storm people’s homes and seize their phones and computers almost always remain faceless.

It is time to query whether “independence” is a quality with no downside. Where there are no controls and no accountability, in any organisation, the conditions for corruption to flourish are rife. Because these government agencies are not courts and can therefore not convict, nor pass sentence, they have developed a means of punishment that is in many cases far worse.

Well in advance of any charge being laid, often in cases where charges will never be laid and even in cases where the decision that no charge will be laid has already been made by the proper authorities, ICAC justifies its existence by condemning the presumed innocent in the media.

Even if we have done nothing for which the proper law would punish us, can any of us be confident that we won’t be caught up in an effort to investigate the perceived breach of some pettifogging ordinance that a government official has decided is suddenly of such importance that all the protections of the common law are to be circumvented?

We must insist that all government agencies remain subject to the rule of law. If we don’t, we can be certain that our hard-won freedoms and protections under the common law will be inexorably eroded.

Margaret Cunneen is a deputy senior Crown prosecutor in NSW. This is an edited extract from her recent address to the Samuel Griffith Society

There are fresh accusations NSW’s Independent Commission Against Corruption held back ­evidence at a public hearing that would have undermined its ­narrative. The latest claims were raised by Newcastle businessman Andrew Poole, whose lawyers say ICAC seized documents that supported Mr Poole’s evidence but never made them public. His lawyers learned ICAC held the documents only after it had found him corrupt in 2013, after an inquiry into coal exploration ­licences known as Operation ­Acacia.

The lawyers have written to ICAC’s independent inspector, David Levine, asking him to ­investigate. Mr Poole was exonerated by the Supreme Court in 2014.

The complaint says ICAC ­“unjustly failed to put before the public inquiry in Operation Acacia all relevant docu­ments”. It says ICAC and some of its then most senior officials knew or should have known of the ­exculpatory documents and ­“unreasonably or improperly failed to explore the content of the documents” with Mr Poole. It urges Mr Levine to consider whether this amounts to maladministration under the ICAC Act. Officials named in the complaint did not respond and ICAC said it did not comment on complaints to Mr Levine. One said he was unaware of Mr Poole’s complaint. The complaint is the latest to focus attention on how ICAC deals with evidence.

In civil proceedings last month, ICAC counsel Jeremy Kirk SC told the Supreme Court that ICAC believed it did not have to make exculpatory material available at public hearings because it was ­impractical.

The Australian revealed last week that ICAC refused to provide the NSW Director of Public Prosecutions with transcripts of evidence the prosecutor wants to examine concerning a high-­profile criminal prosecution. Correspondence shows ICAC rejected a DPP request to lift a suppression order it imposed on trans­cripts from secret compulsory examinations.

DPP Lloyd Babb SC is expected to be asked about his access to the material assembled by ICAC when he gives evidence tomorrow to state parliament’s ICAC oversight committee. Commissioner Megan Latham will testify on Friday.

In Mr Poole’s case, ICAC recommended the DPP consider charging him for agreeing to have his company, Doyles Creek Mining, publish false and misleading material to the NSW Department of Primary Industries. Mr Poole had disputed this at the ICAC hearing and the ­Supreme Court ruled he was not aware the submission was misleading. The DPP decided not to charge him on that count.

His complaint says during the court case he learned some Doyles Creek Mining documents supporting his evidence had not been made public during the hearing. A lawyer realised ICAC had been given this material when Mr Poole’s legal team sought documents from law firm that had been the lawyers for Doyles Creek Mining, Sparke Helmore.

NSW Premier Mike Baird. The planned closure of the greyhound industry will destroy part of the NSW economy estimated to be worth $335m

Mike Baird’s state government likes to portray itself as a friend of business. But if it is truly committed to strengthening the NSW economy it needs to dramatically change its dismissive approach to the rule of law when it comes to property rights.

There is a clear link between strong property rights, the rule of law and economic success. Yet two sensational disputes have made it clear that the NSW Coalition — under Baird and his predecessor, Barry O’Farrell — believes it can erode that link with impunity. It is wrong. Baird’s government is playing with fire.

In free societies, a healthy respect for the rule of law and property rights are two of the main preconditions for economic success. That does not mean that property rights are inviolate. It simply means that private property should only be taken from its owner by due process of law.

And by due process, I mean the ordinary law applied by the ordinary courts. Yet the NSW Coalition has started to ignore that principle, most recently with its planned closure of the state’s greyhound industry. This is the second time it has decided to destroy the value of private property held by innocent people without bothering to secure a finding of wrongdoing by a court.

The risk here is clear: unless the NSW Coalition disavows this approach to government, more private property will be attacked whenever the Coalition determines. This sort of public policy is the equivalent of taking out advertisements in Tokyo, London and New York urging institutions to invest their money elsewhere.

The disputes that have brought this to a head are very different, but they show the Coalition’s practice of attacking private property, and bypassing the rule of law, is getting worse.

The planned closure of the greyhound industry will destroy part of the NSW economy that has been estimated to be worth $335 million. When judged by the money involved, Baird is an even greater threat to property rights than his predecessor. In January 2014, O’Farrell destroyed about $300m in shareholder value when he expropriated coal exploration licences.

If Baird persists with his attack on the greyhound industry, the value of private property destroyed by the Coalition since 2014 will be about $635m. In both cases, the Coalition based its actions on reports from commissions of inquiry where the evidence was never subjected to the adversarial processes of courts that have been shown to be the most rigorous method of identifying dross.

In both cases, the Coalition pre-empted the normal processes of the criminal law that protect the innocent and punish only those whose guilt is established beyond reasonable doubt.

Instead, they used legislation to expropriate the coal exploration licences — imposing massive financial losses on innocent shareholders in the companies that held those licences. With the greyhound industry, the Coalition plans to do exactly the same. Instead of allowing the criminal law to punish the guilty and protect the innocent, it plans to use legislation to punish everyone.

Normally, the state’s first law officer might be expected to have something to say about this. But Attorney-General Gabrielle Upton is a junior minister who was tipped this week to be dumped in a pending reshuffle. Her silence is deafening. But there is cause for hope. In both cases, the rationale for the Coalition’s actions — the reports of the inquiries — is itself under attack in the courts. That might prompt a rethink.

If the courts find flaws in the way those inquiries were conducted, the Coalition’s position will be even more tenuous than it is now.

It is bad enough for a Coalition government to attack property rights and sidestep the rule of law. But to do so based on a flawed understanding of reality would be inexcusable.

With the greyhound industry, David Bennett QC — a former commonwealth solicitor-general — has produced an opinion that attacks the legitimacy of the inquiry undertaken by former High Court judge Michael McHugh. That opinion bolsters a legal challenge to the McHugh report that has now been filed with the Supreme Court.

Long before that case is decided, the Coalition will need to deal with the repercussions of a civil case that seeks to strike down key parts of the report that O’Farrell relied upon when he cancelled the coal exploration licences.

O’Farrell was acting on the recommendation of the Independent Commission Against Corruption, which considered the licences to be tainted because of the manner in which they had been issued by the previous Labor government.

It needs to be kept in mind that ICAC is not a court and is independent in name only. It is an arm of the executive, not the judiciary, and The Australian has reported the fact that there was extensive contact between ICAC and the government while the inquiry that led to this recommendation was under way.

The challenge to ICAC’s findings, which started this week in the Supreme Court, is being brought by a man whose name will be familiar to everyone in NSW — Eddie Obeid, the former politician who was recently convicted on the criminal charge of misconduct in public office.

But the civil case is not about Obeid. It is all about the procedures adopted by ICAC, its former commissioner David Ipp, and its former counsel assisting, Geoffrey Watson SC.

If Obeid and his sons succeed in showing the coal inquiry, known as Operation Jasper, was tainted by misfeasance, it will highlight the political risk of bypassing the rule of law when it comes to private property.

Because of the relatively weak nature of all state constitutions, the rule of law is all that stands between the power of state governments and the right to private property.

Until recently, most state governments understood that while they had the power to attack property rights by sidestepping the rule of law, it was simply not in their interest to do so. From the perspective of the world’s centres of capital, Australia is an attractive place in which to do business not because of the sunny disposition of its people, but because foreign investments are protected by the rule of law.

If the NSW Coalition continues to undermine property rights in this way the impact will eventually be felt throughout the nation. Need proof?

In 2014, when O’Farrell cancelled the exploration licences, a treaty with the US was in force that banned the expropriation of US assets in Australia unless it was done with “due process of law” and was followed by “prompt, adequate and effective compensation”.

None of those things happened. And to make matters worse, a provision in O’Farrell’s expropriation legislation grants the government and its officials immunity from any damages claim over the expropriation.

The Coalition was not prepared to subject its actions to the independent justice system.

The total losses imposed on innocent shareholders from that episode are estimated to be worth about $300m.

One of the companies that lost its exploration licence, NuCoal Resources, says its US shareholders lost about $120m.

Last year, I tracked down two of the US institutions that had invested in NuCoal — Ventry Industries, which is an investment holding company based in western Massachusetts, and the Boston-based Sparta Group. Both companies told me they would never invest in Australia again — not just NSW — but the entire country.

Ventry’s executive director, Rob Roy, had this to say: “If there is no effective rule of law where you can go through due process, be heard, and be compensated if you are in the right, why would anyone invest in a country that doesn’t have a rule of law that is enforced?”.

From the perspective of these US companies, NSW must look like a banana republic — and it is easy to see why. They had no notice of any corruption and were never accused of wrongdoing.

They invested in good faith in NuCoal — a company that ICAC found had done nothing wrong.

Less than three years after O’Farrell took away those assets, the Coalition is at it again. Many might see that as a pattern of behaviour.

Some might even conclude that the rule of law no longer protects property rights in NSW.

This might not prompt an international investment boycott, but it will inevitably have an effect at the margin. Some investors who might once have done business in NSW will go elsewhere.

This article is based on an address this week to the legal staff of the Australian Securities & Investments Commission.

Used with permission (WTF)

]]>ICAC’s ongoing smear shows need for reformhttp://wavetheflag.org.au/2016/08/05/icacs-ongoing-smear-shows-need-for-reform/
Fri, 05 Aug 2016 02:42:36 +0000http://wavetheflag.org.au/?p=1258Former NSW Independent Commission Against Corruption commissioner David Ipp, in his response to the review of that agency by its independent inspector, knows of no one whose reputation has been undeservedly trashed by the commission. Not one single person.

He refers to several people, including former State Emergency Service commissioner Murray Kear, whose reputations were trashed by ICAC.

But he impliedly considers that the reputation of Kear deserved to be trashed.

The true story is that ICAC had found Kear had engaged in corrupt conduct by dismissing his deputy substantially in reprisal for making complaints about another deputy.

ICAC then prosecuted Kear criminally for the dismissal. But the criminal prosecution was thrown out, with the court finding that Kear had proved that he did not dismiss the deputy for that reason.

The court went on to find that ICAC’s investigation was unreasonable and improper, and that the proceedings were instituted without reasonable cause.

The court found that ICAC also failed to provide all the relevant interviews to the crown and in effect cherry-picked the crown’s brief. The court awarded costs to Kear.

All of these matters are on public record and were the subject of the Rule of Law Institute’s detailed submission on the inspector’s review. But Ipp failed to mention any of them.

Instead, it appears he impliedly considers that Kear deserved to have his reputation trashed because he alleges that Kear failed to disclose or explain two things: first, why his dismissed deputy was paid damages for wrongful dismissal; and, second, a report of the Public Service Commissioner following which Kear resigned.

But the settlement by the government of the claims of the dismissed deputy were well known to ICAC at the time and well known before the public examination by ICAC, which was conducted by Ipp as the commissioner.

In addition, the resignation of Kear resulted from the ICAC report into him, not from any report of the Public Services Commission, as was well known to ICAC.

Ipp is a barrister, a QC, a former judge and a former ICAC commissioner who was in charge of the public examination of Kear. One might expect him not to impliedly assert without good grounds and in a balanced manner that a person’s reputation was deservedly trashed by ICAC.

But he has done this on grounds that are faulty and that do not have regard to the failures of ICAC.

It appears that ICAC not only is incapable of apologising when it gets it wrong but continues to smear an innocent person.

Ipp presumably typifies the thinking of ICAC and illustrates the culture and why it is in desperate need of reform.

By Robin Speed – (president of the Rule of Law Institute of Australia.)

Two former politicians who have been abandoned by their parties have urged the NSW government to prevent the state’s Inde­pendent Commission Against Corruption from using public hearings to destroy the reputations of innocent people.

These calls for change have been made by Jeff Salvestro-­Martin, who lost Labor Party preselection for the 2013 federal election due to an ICAC public hearing, and Marie Ficarra who lost Liberal Party endorsement after appearing before ICAC in 2014.

Despite facing accusations of wrongdoing by ICAC, no charges have ever been laid against them and ICAC informed Ms Ficarra last year — long after she had lost her political career — that she would not be found corrupt.

In Mr Salvestro-Martin’s case, serious doubts have now emerged about whether ICAC properly understood the law that it had accused him of breaching.

The calls for change come soon after ICAC’s independent inspector David Levine urged the state government to abolish the commission’s public hearings and introduce an “exoneration protocol” that would permit people to clear their names when adverse findings by ICAC fail to produce convictions.

ICAC Commissioner Megan Latham has criticised both proposals.

Mr Levine’s report singles out Mr Salvestro-Martin and says his experience shows how public hearings can have a significant negative impact on the reputation, career and family life of those involved.

He had been referred to adversely by ICAC in a press release, a “fact sheet”, at public hearings and in a final report that recommended consideration should be given to charging him with breaches of the NSW election funding laws.

ICAC continues to publish that material on its website.

The report released last week by Mr Levine reproduces correspondence from the Electoral Commission that indicates ICAC and the Electoral Commission have different views on how the electoral funding laws operate.

The Electoral Commission’s assessment is in line with arguments from Mr Salvestro-Martin that were rejected by ICAC.

The correspondence, dated October 26 last year, came long after his eight-year-old daughter had been asked by her teacher after the 2013 election if she had any objection to the class discussing what had happened to her ­father.

“When they say ICAC has an impact on people, I don’t think the level of that impact is understood by Megan Latham,” Mr Salvestro-Martin said.

“My son said to me the other day ‘Dad, when is this ICAC stuff going to disappear off the web? Whenever I look up my name, all your stuff comes up.’

“He rightly says that this is going to impact his future. I’ve got two boys and they turn 15 in July.

“If a prospective employer types in our name, which is pretty unusual, that rubbish is going to pop up. What is missing is what David Levine has said — that there was no corruption and wrongdoing. That stuff doesn’t come up as No 1. What sits there is the salacious Sydney Morning Herald bile.”

Mr Salvestro-Martin was stripped of ALP preselection for the seat of Bennelong on July 12, 2013, one day after a report in The Sydney Morning Herald revealed that ICAC had ordered him to appear at a public hearing.

Mr Salvestro-Martin had been a Labor member of Ryde City Council and on the day he lost preselection, ICAC issued a “media alert” saying he would be questioned about undisclosed political donations in the form of advertising in a local newspaper, The Weekly Times.

Section 96E (3) of the NSW Election Funding, Expenditure and Disclosures Act says a banned indirect campaign contribution does not include anything worth less than $1000.

ICAC rejected submissions from Mr Salvestro-Martin and four other Ryde councillors that the cost of the advertising was $696.66 each, which was below the statutory limit.

ICAC believed they were liable because the aggregate cost exceeded the $1000 limit.

The letter from the Electoral Commission in Mr Levine’s report says: “Each candidate or group is not required to disclose the full cost of the advertising but rather the amount of expenditure paid by the candidate or group.

“In this scenario no candidate or group is making or accepting an indirect campaign contribution …,” the commission wrote.

Mr Salvestro-Martin has allowed his ALP membership to lapse and was “enormously disappointed” that the party had not upheld the rights of the individual that he once believed was one of its fundamental principles.

“They dropped me like the proverbial hot potato,” he said.

Chris Merritt- The Australian

(WTF used with permission)

]]>‘Don’t act like a banana republic’: US business warns Australiahttp://wavetheflag.org.au/2016/04/16/dont-act-like-a-banana-republic-us-business-warns-australia/
Fri, 15 Apr 2016 22:59:12 +0000http://wavetheflag.org.au/?p=1239A leading US business lobby group has warned the federal government that Australia risks being wrongly perceived as “a banana republic” because of an ICAC-driven expropriation of American assets.

This assessment, by the American Chamber of Commerce in Australia, has been triggered by the NSW government’s refusal to compensate US investors when it stripped them of assets worth about $100 million two years ago. The chamber has told the Department of Foreign Affairs and Trade that the refusal to compensate US investors “could cause great damage to the unparalleled bilateral economic relationship between the US and Australia”.

“Australia is most definitely not a banana republic, and must not be allowed to be viewed as one, as could be the result if this dispute is not resolved through full restitution of the aggrieved parties,” said AmCham chief executive and former US consul general Niels Marquardt.

“This extraordinary and blessedly unique event, in our view, has the potential to sully Australia’s reputation as a place to do business far out of proportion to the size of the investment,” he said.

This warning is outlined in the chamber’s submission to DFAT ahead of talks on May 4 with the US government about the operation of the Australia-US Free Trade Agreement. One of the main agenda items will be claims for compensation by US investors who own 30 per cent of the Australian company NuCoal Resources.

NuCoal’s main asset — a coal exploration licence the company believes was worth about $360m — was cancelled in 2014 by the NSW government led by former premier Barry O’Farrell. While no accusation of wrongdoing had been made against NuCoal, Mr O’Farrell cancelled the licence on the recommendation of the Independent Commission Against Corruption after an inquiry into the way the licence had originally been issued in 2008 to Doyle’s Creek Mining, a company bought by NuCoal in 2010.

NuCoal’s submission to DFAT shows the company wants both governments to enter into consultations about subjecting the claims of US investors to international arbitration. AUSFTA provisions mean US investors who are stripped of assets require agreement by the Australian government before their grievances can go to arbitration.

NuCoal chairman Gordon Galt said he believed the federal ­government had nothing to fear from independent arbitration.

“If Australia is confident it is not liable, it should not be afraid to run the case; and if it is liable then it should examine the evidence as quickly as possible and seek to come to some sort of understanding before suffering international embarrassment,” Mr Galt said. He expected the arbitration proceedings to cost $US4m to $US6m, well short of the $100m in dispute. “It’s well worth it,” he said.

If the federal government agreed to arbitration, Mr Galt said the proceedings could take place in Washington, New York, London or Singapore. Regardless of the outcome of next month’s talks, the dispute has already prompted the AmCham to change its mind about the strength of the rule of law in this country.

The chamber’s submission to DFAT says that when the AUSFTA was being drafted it was decided not to include a provision known as an investor-state dispute settlement provision. These provisions give foreign companies the right to initiate dispute settlement procedures against host governments without involving their home governments.

AmCham’s submission says an investor-state provision was not considered necessary with Australia because each country was considered to have “such a strong rule of law that investors from either country, in the case of a dispute, would find fully adequate redress in the legal system of the other country”.

“The NuCoal expropriation reveals that premise to have been faulty, as concerns Australia,” the AmCham submission says. The NSW legislation that stripped NuCoal of its licence also prevents US and other investors from challenging the state government’s actions in the courts.

US law firm Quinn Emanuel Urquhart & Sullivan, which has been advising the US investors, said NuCoal’s experience reflected a real and growing sovereign risk for domestic and foreign investors in Australia. “The very least the Australian government can do to calm the fears of international investors is to assure them that they will at least have access to an independent forum to adjudicate their claims — just as we would expect Australian companies could enjoy in foreign jurisdictions,” said Quinn Emanuel Sydney partner Michael Mills.